As London is in the grips of a gold shortage, many are blaming Donald Trump for it; here's why

A shortage of gold has gripped London as its traders scramble to take back gold bars from the Bank of England (BOE) and ship them to the United States amid mounting fears that the Trump administration might impose tariffs on its imports, as per a report.

Background

Gold inventories in New York have reached to the level which was last seen during the start of the COVID-19 pandemic, with stockpiles in the city reaching $82 billion, reported Fortune. Much of that gold has been shifted since Trump's election victory in November as traders brought 393 metric tonnes into the Comex commodity exchange in New York, as per the report.

Wait period increases

According to Reuters, the waiting periods to withdraw gold from the BOE rose dramatically to as long as four weeks compared to just a few days in the past. One person aware of the matter said it can take as long as eight weeks, reported Financial Times.


“People can’t get their hands on gold because so much has been shipped to New York, and the rest is stuck in the queue,” an executive told Financial Times. “Liquidity in the London market has been diminished.”

Recent BOE data showed that the gold inventory of the bank had gone down steadily since November, reported Fortune.

Andrew Bailey tries to calm the situation

BOE Governor Andrew Bailey tried to downplay the situation and said "London remains the major gold market in the world. If you are involved in that market and want to trade or use your gold, you really need to have it in London,” quoted Fortune.

Bailey's efforts to soothe the fears about the gold outflow from London also reflect behaviour changes by investors who are beginning to make bets based on uncertainties surrounding trade policies under US president Donald Trump, as per the report.

FAQs

Why is there a gold shortage in London?
Traders are rushing to move gold to New York over concerns that the Trump administration might impose tariffs on imports.

How long does it take to get gold from the Bank of England?
Wait times have increased, with some traders waiting up to eight weeks to retrieve gold as much of it has already been shipped to the US.